I won’t pretend to understand every nuance of the myriad of Federal Reserve rescue measures that have been implemented in just the past few months. I don’t think anyone does.

My two initial reactions are: 1) this is too much power concentrated in one institution and in one person. I’d also say that one person is accumulating quite a spotty record so far; not to mention being completely asleep at the switch over the past few years. 2) Let’s all hope we are not fighting “the last war” –meaning the Depression. Perhaps the same strategies that were effective then might not be the best ones for today’s world?? And that is not even to mention that much of what was tried during the Depression and then during the Japanese financial collapse FAILED. What ended up rescuing the US economy from the Depression was World War 2 and what ended up (temporarily?) rescuing the Japanese from their malaise was the rise of a new trading partner, China. All of this “we learned our lessons and know what to do this time” is simply whistling in the graveyard.

We really have little alternative at this stage but to hope that eventually our elected and non-elected leaders will find some answers and display better judgment and leadership than they have so far.

Posted October 23, 2008 by Nathan Gendelman